The EU’s Forced Labour Regulation and how it affects all companies

May 7, 2026 

What is the Forced Labour Regulation?

On December 13, 2024, the Forced Labour Regulation, targeting the unethical practice of forced labour, entered into force. This Regulation aims to effectively prohibit the placing and making available on the EU market and the export from the EU market of products made by forced labour. The ban of products made with forced labour will start on December 14, 2027.The Forced Labour Regulation reflects a growing global consensus that business must play an active role in upholding human rights. Beyond legal compliance, companies also face increasing scrutiny from consumers, investors, and stakeholders who demand ethical supply chains. Non-compliance can result in reputational damage, loss of market access, and financial penalties.

Who does it apply to?

The Forced Labour Regulation will impact a wide range of companies, as it applies to all economic operators, regardless of their size or location. Any product made using forced labour at any point in the company's supply chain falls within its scope.

As a consequence, you are prohibited from importing (placing or making available) on the EU market or exporting products that have been produced using forced labour. This prohibition applies to all products sold in the EU, regardless of industry, sector, or geographical origin. 

To comply with the prohibition, companies are expected to carry out due diligence by implementing mandatory requirements and best practices aimed at preventing or eliminating any use of forced labour. While such due diligence is not, as such, a legal obligation but rather a recommendation, companies that fail to undertake adequate due diligence will be more exposed to investigations by the competent authorities or to the withdrawal of their products from the EU market. As a result, in practice, due diligence cannot be regarded as optional.

How will this prohibition be enforced?

In order to enforce the obligations under the Forced Labour Regulation, competent authorities will be designated. Depending on the location of the suspected forced labour violation, the competent authority shall be either the relevant EU member state’s designated authority (for suspected forced labour within the EU) or the European Commission (for suspected forced labour outside of the EU).

In order to coordinate enforcement across Member States and the Commission, a Union Network Against Forced Labour Products will be established. This network will help streamline investigations and share best practices.

The competent authorities are authorized to conduct investigations based on a risk assessment approach to evaluate potential violations under the Forced Labour Regulation. Before launching an investigation, the competent authority will first request information from the company concerned on the measures taken to identify and mitigate forced‑labour risks within its value chain. A formal investigation will be opened only where significant indications of violations are identified.

Investigations can be triggered either by the authorities themselves or by credible submissions from third parties, such as NGOs, trade unions, or whistleblowers. The Forced Labour Regulation also foresees the creation of a public database of high-risk areas, sectors, and products to guide enforcement priorities. 

Where competent authorities suspect that a product placed on the EU market has been made using forced labour, they may prohibit its placing on or export from the EU market and require the withdrawal or disposal of products already placed on the market. Non‑compliance may also result in financial penalties for the company concerned.

What is the link with due diligence under the CS3D?

The Forced Labour Regulation is closely linked to the Corporate Sustainability Due Diligence Directive (CS3D), as both instruments pursue the common objective of preventing and addressing adverse human rights impacts, including forced labour, in commercial value chains. However, they operate through different regulatory mechanisms and scopes.

The CS3D introduces a risk‑based due diligence obligation for certain (very) large companies to address adverse human rights (explicitly including forced labour) and environmental impacts across their operations, subsidiaries and business partners. In contrast, the Forced Labour Regulation establishes a product‑based ban, prohibiting products made wholly or partly with forced labour from being placed on, made available on, or exported from the EU market, applying to all economic operators regardless of size or sector.

Importantly, the interaction between both frameworks must now be read in light of the Omnibus legislative package adopted on December 16, 2025, which substantially reduced the scope of CS3D. While many companies now fall outside the scope of the CS3D, this does not mean that they are exempt of due diligence obligations. Regardless of CS3D applicability, all economic operators remain exposed to the Forced Labour Regulation, which effectively requires robust supply‑chain due diligence and risk management to avoid investigations, product bans, withdrawal orders and financial sanctions.

In practice, this means that the Forced Labour Regulation partially fills the regulatory gap created by the Omnibus revisions to the CS3D. While fewer companies are legally required to conduct due diligence under the CS3D, all companies remain de facto obliged to conduct forced‑labour‑focused due diligence across their supply chain.

How can you prepare?

The Forced Labour Regulation will become applicable as from December 14, 2027. By June 2026, the European Commission will also publish guidelines on effective due diligence practices in this respect, to support implementation.

As due diligence requires time and preparation, businesses are already encouraged to take proactive steps to prepare their businesses. EY Law can support you in developing a tailored action plan to ensure compliance with the Forced Labour Regulation, while also promoting sustainable and responsible business practices more broadly.

Our multidisciplinary team combines legal, regulatory, and operational expertise to help businesses:

• Map and assess supply chains for (a.o.) forced labour risks
• Develop and implement robust due diligence frameworks
• Draft and review supplier contracts to include appropriate safeguards and remedies
• Prepare for potential investigations by competent authorities
• Stay informed about evolving EU and national guidelines